UPI Lite

UPI Lite is a payment feature in UPI that is specifically designed to facilitate low-value transactions that are below Rs. 500 without the use of a PIN. It was developed through a partnership between NPCI (National Payments Corporation of India) and the RBI (Reserve Bank of India) in 2022. The main purpose of this collaboration was to simplify everyday transactions as an alternative to UPI. UPI Lite functions on the existing UPI framework and follows the same protocols as the UPI ecosystem which is designed for mobile phones that offer user-friendly and convenient transactions. The main aim of this payment system is to reduce the burden on the banking framework. There is no requirement for KYC documentation or fees for UPI Lite.

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Features

UPI Lite has some unique features that differ from UPI. Which are:

1: UPI Lite lets individuals make payments up to Rs. 500 without requiring a PIN on their preferred apps. The maximum amount that can be used for transactions is Rs. 4000 in 24 hours.

2: There is a KYC documentation process to go through to use the UPI lite service.

3: UPI Lite enables zero money for transfer or account closure

4: The maximum amount that can be stored in mobile wallets of UPI Lite account is Rs. 2000

5: UPI Lite is accessible to account holders only for specific authorized banks and financial institutions

6: UPI Lite becomes the default payment method for transactions for up to Rs. 500 after setting it up.

7: The UPI Lite facility is not available for multiple bank accounts

8: It enables credit funds in UPI Lite eWallet

9: The balance of the bank account of a user will be automatically transferred when the user disables their UPI Lite

10: The issuing bank monitors and handles all technical issues related to UPI Lite.

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Steps to Transfer Money from UPI Lite to Bank Account

UPI Lite does not only facilitate low-cost money transactions but also allows the transfer of money to a bank account. The most basic thing to understand about transferring from UPI Lite to a bank account is that it can be done only after closing UPI Lite. Given below are the steps on how to transfer money from UPI Lite to a bank account:

Step 1: Open the UPI app that is registered with UPI Lite

Step 2: Search and go to the 'UPI Lite Settings' and select the 'Deregister UPI Lite' option

Step 3: Enter UPI PIN to confirm

The UPI Lite account balance will be transferred to the bank account within minutes.

Transfer Limit

The maximum amount that can be spent through UPI Lite daily is Rs. 4000. The upper limit of each transaction is fixed to Rs. 500. A maximum balance of Rs. 2000 can be maintained daily in the UPI Lite account.

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How UPI Lite Works

A user deposits funds into the UPI Lite account that is linked to a bank account. After adding funds, the user can make transactions and transfer funds through their mobile. Although transactions up to Rs.500 can be done without an internet connection, a stable internet connection is necessary to transfer or add funds and make credit payments.

1: Registration: The first and main thing is to register and activate the UPI Lite account to link it to the bank account

2: Adding Funds: After linking UPI Lite to a bank account, the user can add funds to the UPI Lite wallet through the linked bank account.

3: Making Payments: The user can transact without using a PIN once the money is added.

4: Offline Mode: UPI Lite facilitates transactions that can be made without an internet connection. This feature is helpful when a fund transfer is needed, and a stable internet connection is not available.

UPI Lite is designed to simplify transactions and reduce the load on banking systems. It provides a user-friendly and convenient platform for low-cost daily transactions.

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Benefits of Transferring from UPI to a Bank Account

Transferring money from UPI Lite to the bank account is a simple procedure and is also beneficial

1: The success rate of transferring money through UPI Lite has improved

2: The single-factor authorization has made it convenient for payments that are less than Rs. 500

3: Payments through UPI Lite are not recorded in the user’s bank passbook and will not be included in the bank statement.

4: UPI Lite has a user-friendly interface for convenient transactions and transfer of funds.

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How to use UPI Lite?

UPI Lite payments can be used through many different payment apps in India.

Google Pay: follow the below steps to use UPI Lite through Google Pay

Step 1: Download the Google Pay app

Step 2: Search and go to profile on the top right corner

Step 3: Select the 'Pay PIN-free UPI Lite' option

Step 4: Add the amount to the UPI Lite account. The maximum amount that can be added is Rs. 2000

Step 5: Enter the UPI PIN to confirm.

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After following these steps, the amount will be deducted from the bank account and will appear in the UPI Lite account balance

PhonePe: given below are the steps to be followed for using UPI Lite via PhonePe

Step 1: Install the PhonePe app

Step 2: Go to profile and search for 'Payment Methods'

Step 3: Select the 'UPI Lite' option

Step 4: Add the amount to the UPI Lite account. The maximum amount that can be added is Rs. 2000

Step 5: Enter the UPI PIN after selecting the bank account.

The UPI Lite account will have the trnasferred balance and will be enabled to make payments.

Paytm: here are the steps to be followed to use UPI Lite through Paytm

Step 1: Open the Paytm app after installing it on the mobile phone

Step 2: Search and go to the profile on the left side

Step 3: Select 'UPI & Payment settings'

Step 4: Go to 'Other Settings', click on the 'UPI Lite' option

Step 5: Select the bank supported by UPI Lite

Step 6: Enter the amount to be added to the UPI Lite account and select the 'Add Money to UPI Lite' option

Step 7: Enter the MPIN, and the UPI Lite account will get activated to be used through Paytm

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UPI Lite and UPI

Both UPI Lite and UPI are payment systems that are created for a hassle-free and safe transaction, but they are very different from each other

Transaction Limit: The main difference between UPI Lite and UPI is the transaction limit. UPI Lite allows transactions of Rs. 500 per transaction, with a total limit of Rs. 2000 per payment. It is designed for low-value transactions that can be done without a strong internet connection. On the other hand, UPI allows higher amounts of transactions that can be done only through a strong internet connection. UPI allows transfers for up to Rs. 1 lakh per transaction.

Functions: Unlike UPI Lite, UPI allows for more than just low-value transactions. It enables transfers from person to person and merchant to person and makes payments for utility bills of different values. UPI Lite allows for quick and convenient transactions amounting to a small value. Purchasing products, paying bills, and other financial activities cannot be carried out using UPI Lite.

Bank Statement: Any transactions made through UPI will be reflected on the bank's statement and passbook. The user will have access to a detailed history of transactions made through UPI. Transactions made through UPI Lite will not be recorded and will not be reflected in the bank passbook. When money is added, only a single entry is reflected in the UPI Lite account balance.

Offline Payment: Both UPI Lite and UPI require a good internet connection to function. However, UPI Lite enables offline transactions up to a certain extent. Small-amount transactions can be made through UPI Lite without strong internet connectivity to send higher amounts as well.

PIN Requirement: UPI requires the use of a 4-6 digit PIN to transfer funds and will not function without a PIN. Conversely, UPI Lite does not require a PIN and can initiate the transfer of funds without it.

Number of Transactions: UPI allows a maximum of 20 transactions by a user within 24 hours. UPI Lite has no limit to the number of transactions that can be made within 24 hours. However, there is a limit per transaction of up to Rs. 500.

UPI and UPI Lite both offer a convenient and easy method of transferring funds or making transactions. Both can be used for making payments and transfers. UPI Lite is preferred to make transactions with low-amount value and also without an internet connnection up to a certain amount. Thus, the amount to be transferred or the availability of internet connection, etc., must be considered when choosing between UPI and UPI Lite for transactions. Users must take into consideration that UPI lite transactions do not reflect in the bank passbooks while UPI transactions do.

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Conclusion

It is easy to understand how to transfer money from UPI Lite to a bank account, as it is a pretty straightforward process. It is a simple and efficient procedure. UPI Lite was designed to create a simple and user-friendly app to easily transfer funds and initiate low-cost transactions. The process of withdrawing money is also pretty simple for users to reclaim their balance whenever they require as long as the bank account is linked with UPI Lite. The convenience of making low-value payments every day and the ease of transferring funds makes it flexible and easily accessible. UPI Lite was designed to simplify the payment process which is reliable to use.

FAQs

What is UPI Lite?

UPI Lite is a feature under UPI which enables users to initiate low value payments.

Is UPI Lite and UPI the same?

UPI Lite is a feature that is within UPI for low value transactions. UPI Lite enables transactions using a PIN up to Rs. 500 without an internet connection, whereas UPI requires a PIN for every single transaction and needs an internet connection

Does UPI work without the internet?

An internet connection is not needed for all transactions up to Rs. 500. However, an internet connection is needed to transfer funds more than Rs. 500.

Is UPI Lite secured and safe?

Yes. UPI Lite is a reliable source for cashless payments, as it has certain advanced security features that enable safe and secure payments.

Is it possible to withdraw the UPI Lite balance?

Yes. You can withdraw money from UPI Lite after closing the account and transferring the balance to a bank account.

What is the limit for UPI Lite per day?

The transaction limit in UPI Lite for a day is Rs. 4000. The UPI Lite wallet limit is up to Rs. 2000, which can be increased to Rs. 5000 as per the recent changes by the RBI (Reserve Bank of India)

Which banks in India support UPI Lite?

Many banks, including Axis Bank Ltd., Bank of India, Bank of Baroda, ICICI Bank, HDFC Bank, Indian Overseas Bank, Kotak Mahindra Bank, and many more, support UPI Lite in India, but it has been limited in availability and support over the past few years.

Is it possible to activate UPI Lite after deactivating it?

Yes. Depending on the user's convenience, it is possible to activate UPI Lite any number of times after deactivating it.

Are there any charges for making transactions through UPI Lite?

No. There are no service charges for making transactions through UPI or UPI Lite.

How is UPI Lite effective in the banking ecosystem?

UPI Lite reduces the burden on the banking system by simplifying small-value transactions. It helps banks reduce digital traffic as major transactions are done through UPI. This facility will assist banks in taking off the load of doing or recording low-cost transactions.